ET Now: What is your call on the sugar space that seems to be in focus today on the back of decontrolling news? This is being talked about for a while now. How would you advise investors to play the sugar space?

G Chokkalingam: There are two issues involved in this -- one, even decontrol is not going to help the sugar pack to improve the fundamentals in the short term. It will take much longer period for them to adjust to the new decontrol regime and start realising the benefit out of that. Secondly, right now global sugar prices are substantially low. Even on the domestic front we have seen significant correction in sugar prices in the last two months and therefore I would suggest not to play the sugar pack in the short term. One can only play in the medium to long term, and within the sugar pack one should be very-very cautious and choose only the least leveraged sugar companies. One should focus on just one or two stocks basically located in Andhra where the recovery rate is high. Otherwise I would not suggest or encourage you to position yourselves in the sugar stocks at this point in time.

ET Now: What did you make of the degrowth trend that we saw with Jubilant Foodworks and does it seem this could actually rub off to other discretionary spent stories as well?

G Chokkalingam: In my view Jubilant Food is not a cheap stock, it is overvalued. I would strongly recommend booking profits anywhere from 1150 to 1200 range and also I have to be tactical more than the fundamental in picking up the stock and playing on wealth creation. The point is that every second-third year some theme is played out and perception helps to build up huge PE, price to book. S one should be aware of that. I do not think this theme would continue to play in a robust manner going forward. The market would pick up some other theme in the near future and then that theme would be played out in a big way. So considering the overvaluations and considering this reality of the Indian stock market, I would advise booking profits at around 1150 level.

ET Now: How do you read into the government's move to give a principal okay to coal pool pricing? What kind of an impact do you see this having on power producers and what will be your preferred picks in that space?

G Chokkalingam: I am not optimistic on the power producers. I could still remain quite negative because of the confusion involved in fuel supply and problems in importing fuel from Indonesia and also leveraging. So I would continue to stay away from the power utilities and look for opportunities elsewhere.

ET Now: What, according to you, would provide the next trigger for the market because it seems like the positives from the budget are something that the market has already priced in?

G Chokkalingam: I am expecting two triggers to help the market to restore. One is domestic institutions selling, which should taper off very soon. FIIs have a major share in the market and whenever there is a significant outflow from FIIs, it impacts the market. But this time domestic institutions have proved that their behaviour also has a significant impact on the market. For instance, in the last calendar year, the domestic institution sales were up to the tune of roughly 55% of the net inflow from the FIIs, but in the current calendar year, in fact they sold about 22000 crore, which is about 90% of the net inflow from the FIIs. So in my view, their selling is pulling down the market. The second reason is that twice in the past when the Sensex reached 21000, we saw a substantial fall.

So there was a fear factor among the investors this time again when it went close to 21000. Third, I firmly believe that the budget would be a trigger and also in the current earnings session, we have seen about 750 companies posting more than 30% profit growth. Ultimately, we may end up with a 20% year-on-year profit growth. That would also act as a trigger. Another interesting data point on macro front is there are about 30 global retailers who are likely to enter India. So I see great opportunity in terms of a significant amount of dollar coming into the system. All this should play out and maybe for another one or two weeks, the market could be on sideways, but this could be an opportunity to pick up individual stocks. In the next one or two months, all these triggers would play out. I remain quite optimistic that till monsoon forecast comes in, we will not have any serious problem in the market.

ET Now: A quick call on NTPC because that is a stock to watch out for ahead of its massive offer for sale. Even though it is a huge issue, but there seems to be enough appetite for it. What is your call on the stock though in the medium term?

G Chokkalingam: People should wait for the offer for sale to open and they should do bottom fishing. Unfortunately, all the PSU stocks get hammered on the day of offer for sale. It is a good buy even at the current price, but tactically, they can do it on the day of offer for sale. Historically, it used to quote around 2.5 price to book on an average. Right now, it is available at around 1.5 times FY14 book value and even if we go back to, not to 2.5 but even if it commands about 1.7 to 1.8 times adjusted book value, the stock can give returns of anywhere between 15% and 20%. So one should apply when the issue opens and go for a bargain buy.